What’s Ahead For Mortgage Rates This Week – January 11, 2021

What's Ahead For Mortgage Rates This Week - January 11, 2021Last week’s economic reports included readings on construction spending and reports on the national unemployment rate and job growth. Weekly reporting on mortgage rates and jobless claims were also published.

Construction Spending Increases as Demand for Homes Rises

Homebuilders responded to increased demand for single-family homes and increased their spending in November. Construction spending rose by 0.90 percent as compared to projected spending of 1.10 percent and  1.60 percent growth in November. Demand for homes increased in recent months due to the coronavirus pandemic. Homeowners left urban areas and bought larger homes in suburban and rural areas. Low mortgage rates, flight from cities, and needs related to working from home and homeschooling fueled demand for single-family homes.

Construction spending tapered off in November due to seasonal slowdowns and winter weather but is expected to continue growing as record-low mortgage rates encouraged prospective and current homeowners to seek larger homes.

Mortgage Rates Mixed, Jobless Claims Fall

Freddie Mac reported lower rates for fixed-rate mortgages as the average rate for 5/1 adjustable rate mortgages rose. Rates for 30-year fixed-rate rate mortgages fell by two basis points to 2.65 percent. The average rate for 15-year fixed-rate mortgages dropped by one basis point to 2.16 percent. Rates for 5/1 adjustable rate mortgages averaged 2.75 percent and were four basis points higher. Discount points averaged 0.70 percent for 30-year fixed- rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points averaged 0.30 percent for 5/1 adjustable rate mortgages.

Jobless claims fell last week with 787,000 first-time claims filed as compared to 790,000 new claims filed in the prior week. Analysts expected 815,000 initial claim filings. Ongoing jobless claims were also lower with 5.07 million claims filed as compared to the prior week’s reading of 5.20 million continuing jobless claims filed.

Jobs Growth Falls in December; National unemployment Rate Holds Steady

ADP reported 123,000 fewer private-sector jobs n December as compared to 804,000 private-sector jobs added in November. The federal government’s Non-Farm Payrolls report showed similar results for December’s reading on public and private-sector jobs. 140,000 fewer jobs were reported in December as compared to 336,000  public and private-sector jobs added in November. December’s national unemployment rate was unchanged at 6.70 percent. 

What’s Ahead

 This week’s scheduled economic reports include readings on inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be reported.

What’s Ahead For Mortgage Rates This Week – August 3, 2020

What's Ahead For Mortgage Rates This Week - August 3, 2020Last week’s economic reports included readings from Case-Shiller Home Price Indices, data on pending home sales, and the consumer sentiment index released by the University of Michigan. The Federal Reserve released a statement from its Federal Open Market Committee and Fed Chair Jerome Powell gave a press conference. Weekly readings on mortgage rates and expanded reports on jobless claims were also released.

Case-Shiller Home Price Readings Showed Slowing Home Price Gains in May

May readings from Case-Shiller Home Price Indices showed no decline in home prices, but the national pace of home price growth slowed to 4.50 percent from April’s national average of 4.60 percent.

The Case-Shiller 20-City Home Price Index reported slower home price growth in May with only three of 19 cities reporting higher home price growth rates than in April. Data for the Detroit, Michigan metro area was not reported. The year-over-year rate of home price growth for May’s 20-City Home Price Index was 3.70 percent as compared to April’s reading of 3.90 percent.

Phoenix, Arizona led the 20-City HPI with 9.00 percent year-over-year home price growth in May; Seattle, Washington followed with 6.80 percent year-over-year home price growth and Tampa, Florida held third place with 6.00 percent year-over-year home price growth. Analysts credited record-low mortgage rates and slim inventories of available homes with keeping home prices afloat, but the spreading coronavirus pandemic may cause home prices to lose ground as would-be home buyers postpone home purchases due to weakening economic conditions.

In related news, the National Association of Realtors® reported that pending home sales increased by 16.60 percent as compared to April’s reading of 44.30 percent growth in pending home sales. April’s reading was the highest growth rate reported for pending home sales.

FOMC Meeting: Fed Says Ongoing Assistance Needed for Consumers

The Federal Open Market Committee of the Federal Reserve left its key interest rate range of 0.00 to 0.25 percent unchanged and said it didn’t anticipate raising the rate in the next three years based on the coronavirus pandemic’s damage to the current economy and the Fed’s low to medium-term outlook. Fed Chair Jerome Powell said that given current economic indicators, it is important for the government to provide ongoing aid to American consumers.

Freddie Mac reported record low mortgage rates as the average rate for a 30-year fixed-rate mortgage fell two basis points to 2.99 percent. The average rate for 15-year fixed-rate mortgages was three basis points lower at 2.51 percent. Rates for 5/1 adjustable rate mortgages dropped by 15 basis points to 2.94 percent on average. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 0.70 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.40 percent.

Jobless Claims Fall, but Remain Far Above Pre-Pandemic Levels

New state jobless claims rose by 1000 claims to 1.43 million claims as ongoing state jobless claims rose to 17.29 million claims from the prior week’s reading of 16.20 million continuing jobless claims. National and state jobless claims rose by 2.04 million initial claims as compared to the prior week’s reading of 2.31 million initial claims. Continuing State and National jobless claims fell to 30.2 million claims from the previous week’s  reading of 31.80 million continuing jobless claims 

The University of Michigan reported that consumer confidence fell in July to an index reading of 72.90 percent as compared to June’s reading of 73.20.

What’s Ahead

This week’s scheduled economic reports include labor-sector reports on public and private-sector jobs, the national unemployment rate, and weekly readings on mortgage rates and new and ongoing jobless claims.

What’s Ahead For Mortgage Rates This Week – July 27, 2020

What's Ahead For Mortgage Rates This Week - July 27, 2020Last week’s economic reporting included readings on sales of new and previously owned homes. State and federal data on new and continuing jobless claims were released along with Freddie Mac’s weekly report on mortgage rates.

Sales of New and Existing Homes Rise in June

Sales of new homes rose at their highest rate in 13 years according to the Commerce Department. New homes sold at a seasonally-adjusted annual pace of 776,000 sales, which exceeded the expected reading of 710.000 new single-family homes sold and May’s reading of 682,000 new homes sold. Analysts said that increased interest in relocating to suburban areas and low mortgage rates fueled buyer interest in new homes.

The National Association of Realtors® reported a sharp increase in sales of previously-owned homes during June. Sales were nearly 20.70 percent higher than in May; 4.72 million previously-owned homes were sold in June at a seasonally-adjusted annual pace. May’s reading for pre-owned homes sold was 3.91 million homes sold. June’s sales pace for previously owned homes was the highest month-to-month gain since 1968.

Sales of previously-owned homes were sharply lower than pre-pandemic levels; potential home buyers were sidelined by concerns over jobs and the general economy.

Mortgage Rates Rise, Jobless Claims Mixed

Freddie Mac reported higher mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 3.01 percent and were three basis points higher. Rates for 15-year fixed-rate mortgages rose by six basis points to an average of 2.54 percent; Mortgage rates for 5/1 adjustable rate mortgages averaged 3.09 percent and were three basis points higher. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 0.70 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.

Initial jobless claims rose to 1.42 million claims from the prior week’s reading of 1.31 million claims. State and federal jobless claims fell to 2.35 million state and federal jobless claims from the prior week’s reading of 2.47 million initial jobless claims filed. Ongoing state jobless claims fell to 16.20 million claims as compared to the prior week’s reading of 17.30 million ongoing jobless claims. State and federal continuing jobless claims fell to 31.80 million claims from the prior week’s reading of 32.00 million ongoing claims for state and federal jobless claims.

What’s Ahead

This week’s scheduled economic reports include readings from S&P Case-Shiller Home Price Indices, data on pending home sales and the Fed’s FOMC post-meeting statement and press conference. Weekly readings on mortgage rates and new and continuing jobless claims will be released along with a monthly report on consumer sentiment.

What’s Ahead For Mortgage Rates This Week – July 6, 2020

What's Ahead For Mortgage Rates This Week - July 6, 2020Last week’s scheduled economic reports included readings on pending home sales, Case-Shiller Home Price Indices, and labor sector reports on private and public-sector job growth. Data on construction spending was also released. Weekly readings on mortgage rates and jobless claims were also released.

Pending Home Sales Jump in May

Sales of homes for which purchase contracts were signed rose by 44.30 percent in May and was the highest month-to-month increase recorded since the report’s inception in 2001..Pending home sales are sales with signed purchase contracts but aren’t closed.

Lawrence Yun, chief economist for the National Association of Realtors® said,  “This has been a spectacular bounce-back and also speaks to how the housing sector could lead the way for a broader economic recovery.” This positive news could be dampened by rising infection rates for the Covid-19 outbreak as some states reversed decisions to re-open additional parts of their economies.

Case-Shiller: Home Price Growth Rises in April

The Case-Shiller National Home Price Index reported that home prices grew by 0.10 percent to 4.70 percent on a seasonally-adjusted annual basis. This reading lagged behind the worst part of the Covid-19 outbreak and analysts cautioned that home price growth would fall in the future. The Case-Shiller 20-City Index reported the top three cities for home price growth were Phoenix, Arizona, Seattle, Washington, and Minneapolis Minnesota. The geographical disparity between these cities differs from recent years when coastal cities dominated home price growth rates.

In related news, the Commerce Department reported improvement in construction spending in May. Construction spending fell -2.20 percent in May as compared to -3.50 percent in April.

 Mortgage Rates Hit All-Time Low; Jobless Claims Ease

Freddie Mac reported the lowest mortgage rates reported since the inception of their Primary Mortgage Market Survey. Rates for 30-year fixed-rate mortgages averaged 3.07 percent and were eight basis points lower. Rates for 15-year mortgages dropped by three basis points on average to 2.56 percent. Rates for 5/1 adjustable-rate mortgages dropped by eight basis points on average to 3.00 percent.

Discount points averaged 0.80 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. 

New jobless claims fell to 1.43 million claims filed from the prior week’s reading of 1.48 million initial claims filed. Ongoing jobless claims rose from 19.20 million claims to 19.30 million continuing jobless claims.filed. New and continuing jobless claims were far above pre-coronavirus levels.

Job Growth Reports Mixed as Unemployment Rate Falls

ADP reported 2.37  million private-sector jobs added in June as compared to May’s reading of 3.07 million private sector jobs added. The federal government’s Non-Farm Payrolls report showed 4.80 million public and private sector jobs added in June as compared to 2.70 million public and private sector jobs added in May.

What’s Ahead

This week’s scheduled economic reports include readings on job openings and weekly reports on mortgage rates and jobless claims.

What’s Ahead For Mortgage Rates This Week – June 29, 2020

What's Ahead For Mortgage Rates This Week - June 29, 2020Last week’s scheduled economic news included readings on sales of new and pre-owned homes and reports on inflation. Weekly reports on mortgage rates and new and continuing jobless claims were also released.

Home Sales Results Mixed for May

The National Association of Realtors® reported fewer sales of pre-owned homes in May at a seasonally-adjusted annual pace of 3.91 million sales. Analysts expected 3.80 million sales as compared to April’s reading of 4.33 million sales. This was the lowest reading for sales of pre-owned homes since July 2010 and sales were 26.60 percent lower year-over-year.

Lawrence Yun,  the chief economist for the National Association of Realtors®, said that sales were expected to rise as coronavirus-related restrictis were lifted and people returned to work. Mr. Yun said in a report that sales of previously-owned homes should surpass last year’s annual sales pace in the second half of 2020. Mr. Yun made this forecast before rising coronavirus cases occurring after the reopening of the economy started.

There was a 4.80 months supply of previously-owned homes for sale in May, which was below the six-months supply indicating a balanced market.

The Commerce Department reported 676,000 new homes sold in May on a seasonally-adjusted annual basis; this surpassed expectations of 650,000 sales and April’s revised annual sales pace of 580,000 new homes sold. New home sales rose by 45.50 percent in May in the Northeastern region; New home sales rose by 29 percent in the West and 15.20 percent in the South, New home sales fell by -6.40 percent in the Midwest.

The average sale price of new homes was $317,900 in May. There was a 5.60 months supply of new homes available in May, which nearly matched the six months average inventory.

Mortgage Rates Hold Steady as JoblessClaims Fall

Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-rate mortgages were unchanged at an average rate of 3.13 percent; The average rate for 15-year fixed-rate mortgages rose by one basis point to 2.59 percent and the average rate for 5/1 adjustable rate mortgages fell one basis point to 3.08 percent. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 1.48 million from the prior week’s reading of 1.51 million new claims. Continuing jobless claims were also lower last week with 19.50 million claims filed as compared to 20.30 million claims filed the previous week.

Rising Inflation Indicates Improving Economy

Inflation rose to a seasonally-adjusted annual pace of 8.20 percent in May as compared to April’s reading of -12.60 percent Analysts expected the inflation rate to reach 9.90 percent.

What’s Ahead

This week’s scheduled economic news releases include readings on pending home sales, Case-Shiller Home Price Indices, and labor-sector jobs reports. The national unemployment rate will be released along with weekly readings on mortgage rates and new and continuing jobless claims.